Public company info - Great Wall Technology Co. Ltd. - H Shares , 00074.HK
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Great Wall Technology Co. Ltd. - H Shares, 00074.HK - Company Profile
Chairman Liu Liehong
Share Issued (share) 454,000,000
Par Currency Renminbi
Par Value 1.0
Industry IT Hardware
Corporate Profile Business Summary: The Company is principally engaged in the development, manufacture, sale and research and development of PCs and information terminal products, storage products, power supply products, monitoring terminal, LCD TV products and EMS business. Performance for the year: During the reporting period, the Group achieved a turnover of RMB92,816.20 million, down 3.2% year-on-year, and recorded a loss before tax of RMB104.90 million. Profit after tax attributable to the equity holders of the Company amounted to RMB73,919,000 for the year ended 31 December 2013, representing an increase of 146% as compared to the corresponding period of last year. Business Review: In 2013, under the leadership of the Board, strategic planning was given full play by the Company in measures such as forcible transformation and structural adjustments. As the industry became more internationalized and market-oriented, the technological contents of the products were further increased and the complexity of the manufacturing processes was further magnified. TPV Technology Limited (“TPV”) continued to maintain its leading position in its business of display monitors, and made efforts to reduce costs, enhance efficiency and consolidate the supply chain. China Electronics Great Wall Energy (Shenzhen) Co., Ltd. (“Great Wall Energy”), a wholly-owned subsidiary of China Great Wall Computer (Shenzhen) Co., Ltd. (“CGC”) took proactive measures to contain risk and minimized loss brought about by the bankruptcy of Satcon Technology Corporation (“Satcon”), a downstream customer in the U.S. Great Wall Kaifa Magnetic Recording Company speeded up the restructuring of existing business, and at the same time explored additional revenue streams by introducing new business, which effectively pulled the magnetic recording business from the bottom of its business cycle. In terms of capital operation and significant investments, the Company closed and deregistered nine companies by reducing operating levels and cutting short the value chains. The directional financing by Shenzhen Kaifa Technology Co., Ltd. (“Great Wall Kaifa”) and the issuance of medium-term notes by CGC achieved substantive results in the initial stage. The major construction projects of China Electronic Great Wall Building have been well in progress. However, the market remained challenging and The Group are not optimistic about the television (“TV”) business in the European market. During a period of transition, Philips’ TV business taken over by TPV continued to record a loss despite the achievement of a substantial reduction in losses, which had a great impact on the Group’s performance for the year. A. BUSINESS DEVELOPMENT 1. Monitor and TV business: monitor business remained to be the largest in the world in terms of market share, but TV business was affected by the performance of Philips’ TV business and recorded a loss. Monitor and TV business of TPV reported mixed performances in 2013. The monitor business continued to maintain global leadership, showing steady performance with improving market share globally. In contrast, TV business recorded a significant loss. The joint venture, “T.P. Vision Holding B.V. (“TP Vision”), is being restructured toward the direction of “cost reduction and enhanced efficiency”, with an aim to achieve positive results in business performance. 2. EMS business: continued to remain in the seventh place among the top 10 globally. Great Wall Kaifa’s EMS business improved steadily. The rapid growth in mobile phone business effectively offset the decline in the traditional business, reflecting an overall upward trend in the business. The Huizhou plant has been put into operation, with a monthly output of 3,000,000 mobile phones, representing a year-on-year increase of 36%. There was also expansion of business into the high value-added “medical devices” manufacturing sector with higher level of technical complexity. New orders have been received from German and Australian customers. Through integration of internal resources and leveraging on its excellent, advanced manufacturing capabilities, Great Wall Kaifa established an automation equipment business division in 2013. While satisfying the demand of in-house production by providing technical and equipment support to internal departments, it also pushed forward to explore external markets with its own automation equipment products enjoying core competitive advantage, with an aim to further develop the upstream market of the advanced manufacturing industries. 3. Power supply business: overcame technical difficulties in power supplies for super computers and successfully helped to fill the void in domestic supply. In 2013, Great Wall Power Supplies Factory overcame technical difficulties in relation to high efficiency and high power density, and developed 3,000W power supply for super computers, with technical indicators that helped to fill the void in domestic supply of power supplies. Substantial breakthroughs were achieved in products including power supplies for servers, communication equipment and LEDs in terms of product transformation. The power supplies for rack-mounted servers recorded a remarkable growth in sales, and it has become one of the most important suppliers of power supplies for servers in China. Sales of power supplies for communication equipment and LEDs also recorded substantial growth, establishing a certain production scale in the industry. Great Wall Power Supplies Factory was once again recognized as the “Brand of No. 1 Market Share (市場佔有率第一品牌)” in the category of power supply products in the “List of China Top IT Brands (中國IT品牌風雲榜)” for the year. 4. Inverter business: positive results were achieved in respect of technology development and market expansion. The acquisition of high quality assets of Satcon has reduced the impact of Satcon’s potential bankruptcy on the business growth of Great Wall Energy to the greatest extent. The operating mode of Great Wall Energy will shift from providing OEM services to single customers toward becoming an operation with combined functions of technology development, supply chain management, manufacturing, product sales, power plant construction and after-sales services. In 2013, Great Wall Energy successfully mastered a number of core PV inverter technologies, including micro PV inverter grid connection technology, SVPWM (space vector pulse width modulation) technology, power line transmission (or BluetoothRS485) technology, maximum power point tracking technology, anti-islanding control technology, wide temperature design and waterproof technology. In addition to the enhancement of Great Wall Energy’s technical strengths, the foregoing also enabled Great Wall Energy to foster a group of professionals and technical talents. Great Wall Energy has also achieved positive progress in terms of certification. B. CAPITAL OPERATION 1. Issuance of RMB500 million medium-term notes by CGC The first batch of medium-term notes was successfully issued with principal amount of RMB500 million and coupon rate of 5.38%. 2. Completion of non-public offer by Great Wall Kaifa Great Wall Kaifa issued 151,981,582 ordinary shares in RMB (A shares) upon completion of non-public offer, with net proceeds of RMB677,336,198.10 net of issuance cost. 3. Capital injection to Chitwing Mould by Great Wall Kaifa Great Wall Kaifa made a capital injection of RMB34.67 million in aggregate, representing 10% of the total equity into Chitwing Mould Industry (Dongguan) Co., Ltd. (“Chitwing Mould”). It has received a dividend of RMB20 million from Chitwing Mould by October 2013. 4. Disposal of land assets by TPV to support main businesses TPV entered into a property resumption agreement with Fuqing government, pursuant to which, Fuqing government agreed to acquire the land and properties located on Plot F1 owned by TPV in Fuqing at a price of RMB576 million. C. MAJOR INVESTMENT PROJECTS AND INDUSTRY BASE CONSTRUCTION 1. LED industrial project of KFES KFES Lighting Company Limited (“KFES”) has installed 21 MOCVD machines and put them into production. The subsequent order of 9 MOCVDs will be delivered, installed and tested in the first quarter of 2014 to prepare for mass production in the second quarter of 2014. Meanwhile, 3 packaging lines for COG (candle lamp) have been completed, and 5 PLCC packaging lines for TV blacklighting products are also in the process of installation. The cooperation between KFES and BridgeLux Inc. (“BridgeLux”) in the U.S. has been progressing smoothly. The Group saw a gradual increase in orders, and the current production lines are already running in their full capacities for BridgeLux. 2. China Electronic Great Wall Building Project The land usage for the project located in CGC Technology Park was changed from “industrial land” to “new industrial premise plus commercial and office premise”. Land premium payment for the project has been made. As at the date of this announcement, CGC has entered into a Data Licensing Agreement relating to basic geographical information of Shenzhen with Shenzhen Information Center for Urban Planning of Stated-owned Land (深圳市規劃國土房產信息中心), and was issued the mapping results including the project construction site topographic map and municipal pipeline diagrams. 3. Construction of Great Wall Kaifa’s industrial base in Dongguan Currently, the industrial land for the project has been successfully acquired, and two pieces of land for research and development have progressed to the stage of public notification. The construction of industrial base in Dongguan is now in a stage of substantive acceleration, and the benefits of maximized efficiency were starting to be seen. The general contractor for the project construction was selected through defined process in form of a tender, and Xinxing Construction Company, a state-owned enterprise, won the bid. 4. Construction of Great Wall Kaifa’s industrial base in Huizhou The industrial base of Great Wall Kaifa in Huizhou was completed and successfully put into operation, resulting in reduced production costs. SMT production lines officially moved into the new plant in May and commenced trial production. The first batch of trial products was put under Samsung’s comprehensive and stringent examination and verification. The products passed the certification successfully, and the new facility will be officially put into operation on 4 July. The total number of employees at the moment is about 3,500 and handset production capacity has already reached 3 million per month. 5. Investment by Great Wall Kaifa in Malaysia To further reinforce the strategic partnership with Seagate Technology PLC (“Seagate”), Great Wall Kaifa established a wholly-owned subsidiary in Malaysia, which, upon completion of the new plant, will receive from Seagate small orders of production for new products and mass production of PCBA (HDD board). At the same time, the plant will also obtain orders for production of enterprise level hard drive ESGPCBA. The establishment of the subsidiary in Malaysia also provides an overseas production platform for other existing businesses of Great Wall Kaifa. D. MANAGEMENT UPGRADE 1. Promoting strategic transformation In 2013, with the Board’s approval of the Group’s and its members’ 2013 to 2015 development plans, the strategic transformation goals of the Group were further clarified. 2. Full implementation of internal control system construction The construction of the Group’s internal control system was put into full swing. 113 systems and 220 processes have been streamlined, 75 summarized defects were identified, and an “Internal Control Manual” was formulated. Through selfdiagnosis and analysis, the Group members have convened internal exchange meetings, organized to learn from benchmarked enterprises, and vigorously implemented various improvement tasks, and achieved positive results. At present, the Group has entered the third stage of continuous improvement and conclusion. 3. Great Wall Kaifa’s “Year of Management Improvement” Great Wall Kaifa has determined that 2013 was its “Year of Management Improvement”. Throughout the year, monthly themes to address different management improvements were held. A lot of improvement opportunities were identified during the course of benchmarking, management awareness education and compliance audits. The knowledge obtained during the improvement activities were gradually implemented through the management improvement programs. Great Wall Kaifa has also introduced new social responsibility management system certification, information security management system certification, business continuity management system (BCM) certification and product safety management system certification (ISO28000). 4. Prevention of exchange rate risk In 2013, Great Wall Kaifa has taken measures to avoid the risk of the impact of fluctuations in the exchange rate of RMB against the U.S. dollars on Great Wall Kaifa’s business. For the reduction of finance charges and the enhancement of capital gains, Great Wall Kaifa has continued to carry out derivative business through stringent risk control and has achieved relatively better results. 5. Promotion of enterprise-level information construction After about one year of effort, Great Wall Power Supplies Factory has successfully implemented IPD (integrated product development) & PLM (product lifecycle management) projects which further raised the research and development management standard to an advanced industry-wide level. In addition, CGC and Great Wall Kaifa have commenced the business intelligence (BI) project, and Great Wall Kaifa’s public platform on WeChat has been formally launched. 6. Full achievement of the objectives of production safety and emission reduction In respect of production safety, the members of the Group took a number of effective measures in 2013, including identification and rectification of defects and deficiencies, follow-through of responsibility assignments, frequent training and drills, and vigorous promotion of standardized establishments for safe production. The objectives for production safety have been achieved and the tasks for emission reduction have all been completed. Great Wall Kaifa has also obtained the “standardization of production safety management system” certification during the year. In 2013, with the efforts of all staff, the Group and its members received a number of awards and honors. In particular, Great Wall Kaifa was awarded the highest honor for Chinese enterprises – the “National May Day Labor Award Certificate (全國五一勞動獎狀)”, the “Special Contribution Award” of Samsung for the third consecutive year, and the “Best Supplier Award” of ResMed for the fourth consecutive year. The “Great Wall” brand was recognized as one of the “Top 10 Leading Consumer Electronics Brands of China (中國十大消費電子領先品牌)”; CGC was awarded the honorary title of “Advanced Entity of Poverty Relief (扶貧工作先進單位)” by MIIT; Great Wall Power Supplies Factory was recognized as the “Brand of No. 1 Market Share (市場佔有率第一品牌)” of power supply products in “List of China Top IT Brands (中國IT品牌風雲榜)” for the sixth consecutive year; and CGC was awarded the “Contribution Award in Aerospace Industry of China (中國航天事業貢獻獎)”, the “Best Green Technology Award for 2013 (2013最佳綠色科技獎)”, the “ Best Public Corporate Image Award for 2013 (2013最佳企業公眾形象獎)” and the “Outstanding Achievement Award of Brand Building (品牌建設傑出成就獎)”. Prospects: Looking into 2014, the Group will actively encourage its member enterprises to accelerate industrial transformation and development. In particular, The Group’s monitors business will continue to reinforce and enhance its current position in the global market. Efforts will be made to help Philips TV business to reduce losses. For EMS business, the Group will strive to overcome the adverse effects of global economic downturn, strengthen and enhance its position in the industry. Regarding LED business, the Group will speed up the development and industrialization of epitaxies/chips and application systems so as to achieve expansion of business scale and build up the capability of steady profits. In the power supply business, the Group will focus strategically and selectively on sectors such as servers power supply, communication equipment power supply and LED power supply, and speed up the transition to the high-end market to become one of the leading suppliers of high-end power supplies in China. The inverter business will accelerate international and domestic market expansion and make extra efforts in development and innovation. The operating mode of Great Wall Energy will shift from providing OEM services to single customers toward becoming an operation with combined functions of technology development, supply chain management, manufacturing, product sales, power plant construction and after-sales services. Meanwhile, the Company will continue to take measures such as forcible transformation and structural adjustments, speeding up of technology development and industrial base construction, so as to enhance the Group’s core competitiveness continuously.

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